According to a Bloomberg report cited by Investing.com, China has introduced new limitations affecting its local companies planning investments in the United States.

People familiar with the situation indicate that branches of the National Development and Reform Commission have been told to stop processing applications for new US-focused investment projects, potentially escalating economic friction between the two nations.

This move coincides with President Trump increasing tariffs and planning further reciprocal measures likely aimed at China, according to the original report. While Beijing has previously restricted certain overseas investments citing national security or capital control concerns, Bloomberg suggests this latest directive indicates a more significant level of scrutiny.

Importantly, these new restrictions reportedly do not affect existing Chinese investments in the U.S., such as holdings of U.S. Treasuries, or the current operations of Chinese companies there.

Related Story: Eyeing China Threat, Trump Announces Boeing Wins Contract for Secretive Future Fighter Jet

The resulting uncertainty may make it harder for companies looking to relocate production facilities to circumvent growing trade barriers. The report notes that some businesses, like Hong Kong’s CK Hutchison Holdings, have already encountered difficulties related to China’s stricter examination of outbound investments.

This policy shift occurs against a backdrop where Chinese investment into the U.S. had already decreased by 5.2% in 2023. These new approval suspensions highlight the increasing difficulties companies face when managing cross-border operations during the escalating trade dispute between the world’s two largest economies.

Read more at Investing.com